Question: Everest Everwear Corporation can manufacture mountain climbing shoes for $10.94 per pair in variable raw material costs and $32 per pair in variable labor expense.

Everest Everwear Corporation can manufacture mountain climbing shoes for $10.94 per pair in variable raw material costs and $32 per pair in variable labor expense. The shoes sell for $95 per pair. Last year, production was 140,000 pairs. Fixed costs were $800,000. What were total production costs? What is the marginal cost per pair? What is the average cost? If the company is considering a one-time order for an extra 10,000 pairs, what is the minimum acceptable total revenue from the order? Explain.

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Fundamentals Of Corporate Finance 6th Edition by Stephen A. Ross, Randolph Westerfield, Bradford D. Jordan

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